The Growth Of The Presidency Banks Essay

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The rapid growth of the presidency banks came to an abrupt halt in 1876, when a new piece of legislation, the Presidency Banks Act, placed all three banks under a common charter--and a common set of restrictions. As part of the legislation, the British imperial government gave up its ownership stakes in the banks, although they continued to provide a number of services to the government, and retained some of the government 's treasury capital. The majority of that, however, was transferred to the three newly created Reserve Treasuries, located in Calcutta, Bombay, and Madras. The Reserve Treasuries continued to lend capital to the presidency banks, but on a more restrictive basis. The minimum balance now guaranteed under the Presidency Banks Act was applicable only to the banks ' central offices. With branch offices no longer guaranteed a minimum balance backed by government funds, the banks ended development of their networks. Only the Bank of Madras continued to grow for some time, supplied as it was by the influx of capital from development of trade among the region 's port cities.
The loss of the government-backed balances was soon compensated by India 's rapid economic development at the end of the 19th century. The building of a national railroad network launched the country into a new era, seeing the rise of cash-crop farming, a mining industry, and widespread industrial development. The three presidency banks took active roles in financing this development. The banks…

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